Economic crisis and upcoming elections thwart reform in Belarus

With presidential elections in Belarus scheduled for October and the government turning to Russia for assistance in mitigating the impact of an economic crisis, the country is unlikely to implement any significant reforms in the near to medium term.

Belarusian president Alexander Lukashenko has been engaged in a public relations campaign to improve his country’s reputation abroad and to position Belarus as a mediator in the conflict between Russia and the West. Lukashenko has worked to portray Belarus as a neutral party in the Ukrainian crisis. By hosting talks among German, French, Russian, and Ukrainian leaders in Minsk in February, as well as Contact Group negotiations involving representatives of all sides and the OSCE, Lukashenko hoped to improve Belarus’s standing with the West.

Reliance on Russia

Belarus and Russia have a complex relationship, especially when it comes to trade and economic disputes. Most recently, the two countries have sparred over the re-exportation of Western goods through Belarus. In 2014, in response to Western sanctions, Russia imposed a ban on food imports from the European Union, the United States, and other Western-aligned countries. Some Western foods, however, have illegally found their way into the Russian market by being re-exported through countries such as Belarus.

Russian border guards stationed on the Russia-Belarus border have begun destroying food imports originating from Western countries, with Russian officials charging that Belarus — a member of the Eurasian Economic Union and thus of a regional free trade zone – should do more to halt the re-exportation of Western food products to Russia.

Despite these disputes, since gaining its independence, Belarus has been heavily dependent on Russia. Belarus has close defense ties with its larger neighbor, conducting frequent joint military exercises. In 2014, Russia’s military announced that it will open a new air base in Belarus’ Babruysk in 2016. Belarus is a member of various Russia-led security and economic blocs, including the Collective Security Treaty Organization (CSTO) and the Eurasian Economic Union.

Belarus’s ongoing economic crisis has deepened the country’s reliance on Russia. Belarus has $4 billion in loan repayments due in 2015, with much of the debt owed to Russia and the International Monetary Fund. A regional currency crisis stemming from the fall in the price of oil and fighting in Ukraine put pressure on Belarus’s economy. Foreign currency reserves plunged from about $3.9 billion in November 2014 to merely $1.67 billion in July 2015.

To help mitigate the impact of the crisis and aid Belarus in meeting its financial obligations, Russian officials in March announced a $110 million loan to Belarus and declared that the terms of some past loans would be changed. In late July, the Russia granted Belarus a $760 million loan.

Upcoming presidential election

Belarus will hold presidential elections on October 11. The country’s last presidential election, in 2010, sparked mass street protests that led to arrests and the imprisonment of the regime’s opponents. The regime is already working to quash potential dissent ahead of this year’s polls, employing media restrictions, expulsions, and detentions.

While President Lukashenko has invested time and resources in improving the country’s image, he prioritizes the survival of his regime and the suppression of opposition above his government’s image abroad. In an election year, Lukashenko is especially focused on boosting his domestic position.

Belarus is one of Russia’s closest allies, but the country’s financial crisis is exacerbating its reliance on Moscow. At the same time, as elections approach, the regime will concentrate its efforts on limiting dissent and maintaining a strong position of power at home, at the expense of relations with Western governments.

Despite President Lukashenko’s public gestures and symbolic attempts to balance Belarus’s relationship with the EU with its ties to Russia, reforms in Belarus remain unlikely in the near future.

EU’s carrot and stick approach

The EU has taken steps over the past few years to give Belarusian leaders with incentives to cooperate with the West. Belarus is formally part of the Eastern Partnership program, though the country — unlike Ukraine, Moldova, and Georgia – only participates in the multilateral track and is not pursuing European integration.

Formally, the EU’s strategy in Belarus is to “answer as much as possible to the requests for cooperation with Europe stemming from many state, regional, and local structures as well as from civil society, for the benefit of the Belarusian people.” EU assistance to Belarus currently centers on social inclusion, the environmental issues, and regional economic development.

Nevertheless, Western governments have also imposed sanctions on some Belarusian individuals and entities. There are restrictive measures in place on individuals and entities, who are responsible for human rights violations, the repression of civil society, and democratic opposition. Other individuals or entities have been placed on the sanctions list for benefiting from or supporting the Lukashenko regime.

The European Union’s dual approach of carrots and sticks has done little, however, to change Belarus’s authoritarian political system and practices.

About Author

Lili Bayer is an analyst focusing on Central and Eastern Europe. She has written extensively on the crisis in Ukraine, as well as Russian foreign policy and Central European politics. Lili holds a master's degree in Russian and East European Studies from the University of Oxford and a bachelor's degree from Georgetown University's Walsh School of Foreign Service.